For the first few months of this year, it looked like Hollywood's unionized writers and actors were about to premiere a new labor strategy. As their conglomerate employers raked in record profits from expanding Internet, cable, foreign, video and DVD markets, the writers and actors guilds were talking about staging a fight to win long-deferred increases in residual payments for work that's reused and resold in different media.

With their film and TV contracts expiring back to back, the supposedly militant leadership of the Writers Guild of America (WGA) and the Screen Actors Guild (SAG) spoke of ushering in a new era of pay equity, while producers, the networks and studios braced for a historic Tinseltown strike. The AFL-CIO, meanwhile, came to town ready to advise and support the Hollywood unions in their looming titanic confrontation with the entertainment giants.

But instead of debuting a dramatic breakthrough, it now seems that this season's Hollywood labor push is ending in another dreary rerun of business-as-usual back-room deals. After weeks of on-again, off-again closed-door talks, the WGA reached a three-year agreement with employers on May 4, two days after the contract ran out. And though the deal is being presented to the membership (who must ratify it in early June) as a significant wedge of the economic pie, it is in reality a pretty thin slice. The writers won no increase in video or DVD residuals and failed to achieve the exclusive union jurisdiction over Internet production they sought. No additional residuals were won for material resold to cable. Regarding cable, they won a first-time but modest residual for premium services only. And residual increases for foreign sales will benefit only writers on the most profitable shows. Strengthened "creative rights" were won, but the economic tally is meager. On an industrywide scale, writers' residuals will increase about 2 percent.

After so much heat, why such a paltry settlement? "It was collective bargaining without the collective," says a longtime observer close to the negotiations. At a time when their employers have radically restructured themselves on the most sophisticated mega-merger global scale, the traditionally parochial and insular Hollywood guilds seemed incapable of making the transition to a modern and effective labor movement. The WGA neither mobilized nor engaged its membership in a credible campaign against the producers. How could it when it carried out its negotiations under an official "blackout" that kept not only the media but its own rank and file in the dark?

Instead of reaching out to build new alliances with "below the line" technical and craft unions, it alienated them. Instead of relying on an industrywide movement to wring concessions from the producers, the guild put forward a corporate-molded negotiating team much more experienced in managing studio employees than in representing them. Worst of all, the WGA faked itself out of a better deal. By threatening a strike it was unwilling to prepare for, it converted the possible stoppage into a lethal management weapon, with the studio execs, producers‚ flacks and even the conservative mayor of Los Angeles enthusiastically branding any shutdown a certain economic Götterdämmerung for the strikers.

The actors union, whose contract expires July 1, began its round of talks in mid-May. It's pretty much a foregone conclusion that SAG will now settle--and settle short. The actors have formally shut down even the pretense of a membership contract campaign and have, like the WGA, imposed their own information blackout on the negotiations. That's not all the two guilds have in common. SAG's relatively new Hollywood leadership talks a tough populist line, but it has little interest or experience in doing the hard work of effective organizing and mobilization. The AFL-CIO is quietly packing up its local support operation, sensing that SAG has no stomach for a real fight.

A historic opportunity to bring Hollywood's professional and craft unions together in a powerful new alliance has thus been postponed, if not lost, and just at a time when industry restructuring makes such unity an iron imperative. Instead, there's already an incipient whisper campaign under way, with writers and actors scapegoating each other's unions for producing such disappointing results. Here it is better to quote not Spielberg but Shakespeare: "The fault, dear Brutus, is not in our stars,/ But in ourselves...."

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